Copyright 2016 by Encourage Capital. All rights reserved.
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Case Study

January 11, 2016

The Merluza Strategy : An Investment Blueprint for Industrial-Scale Fisheries in Chile

Publisher(s): Encourage Capital

Funder(s): Rockefeller Foundation, Bloomberg Philanthropies

Author(s): Kelly Wachowicz, Trip O’Shea, Alex Markham

Encourage Capital has worked with support from Bloomberg Philanthropies and The Rockefeller Foundation to develop an impact-investing strategy supporting the implementation of sustainable fishing improvements in the distressed common hake fishery in Chile. The Merluza Strategy is a hypothetical $17.5 million impact investment to restore the hake fishery to its full biological and economic potential. The $17.5 million would fund the implementation of comprehensive fishery management improvements across the fishery, acquire 36% of the total fishing rights (or “quota”) in the fishery, and create a new hake processing and distribution business incorporating jumbo squid products and sales. The Merluza Strategy targets the generation of a 16.4% base-case equity return with upside potential up to 35%, while simultaneously restoring hake stock to 75% of its biomass at Maximum Sustainable Yield (BMSY), generating $104 million in additional income for fishers divided among nearly 1,800 fishers across 12 caletas and delivering 136 million additional legal hake meals-to-market annually.